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Fairpoint Group reports drop in annual revenue on weak IVA market

Financial advisor Fairpoint Group reported a drop in annual revenues, as less people applied for individual voluntary arrangements (IVA).

Revenue fell to £28.4m in the year ended December 31st 2013, from £29.9m. The company said it was a "subdued" year in the market for IVAs, a formal repayment proposal presented to a debtor's creditors as an alternative to bankruptcy.

Cash generated from operations dropped to £9.1m from £13.7m, including £3.0m of exceptional VAT related revenue.

Nevertheless, adjusted pre-tax profit rose to £8.1m from £7.6m, in line with expectations as the company diversified its income streams.

Revenues from diversified activities, which comprises debt management and claims management services, accounted for 42% of total revenue, compared to 36% in 2012.

"The group has continued to diversify its income streams and grow its profits, despite subdued conditions within the IVA market," said Chief Executive Chris Moat.

"Opportunities to provide additional products and services are being pursued, including legal services, to ensure continuing momentum. The group has entered the year with significant growth in its debt management base, which has grown by over 60% since the end of 2012, and is well placed to build on this given its strong cash generation and access to finance facilities."

The company proposed a final dividend of 3.85p, taking the total dividend for the year to 6p, up 9% on the previous year's 5.5p.

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